Lok Sabha passes pension fund bill

The Lok Sabha has passed the Pension Fund Regulatory and Development Authority Bill (PFRDA), 2011, to regulate the New Pension System (NPS).

The bill was introduced in the lower house in March 2011 to provide for a statutory regulatory body. Currently the PFRDA has a non-statutory status.

NPS has been made mandatory for all the central government employees (except armed forces) entering service with effect from January 1, 2004, a finance ministry statement said. In all, 26 states have already notified NPS for their employees.

“NPS has been launched for all citizens of the country including un-organised sector workers, on voluntary basis, with effect from May 1, 2009,” the statement added.

The ministry said the PFRDA Bill would also provide subscribers a wide choice to invest their funds for assured returns by opting for government bonds as well as in other funds depending on their capacity for risk.

The lower house of Parliament also approved changes aimed at luring foreign asset managers to run retirement funds, a small victory in the government efforts to rescue the economy before elections next year.